RP On the Web!

Initial jobless claims rose to 412,000 last week, ending what appeared to be a trend in declining unemployment rates. Most of the so-called analysts predicted that jobless claims would decline again to about 385,000 new claims for unemployment. The four-week moving-average was also adjusted higher than expected, casting a pale light on hopes that an economic recovery promised by Anti-President Barack Obama may actually be taking hold. Inflation fears, mainly due to rising gasoline and food prices, appear to be the cause of a fresh round of uncertainty in the markets.

Also leading the way to a double-dip recession is the ailing housing market. RealtyTrac reported a rise in home foreclosures of 6.5% in March. Coupled with other reports, showing that housing values declined in every major city except the Washington, DC market further fuel the bad economic news. While a report yesterday showed that consumer spending increased in March by 0.5%, or 0.8% when not including auto sales, this number could be a reflection merely of higher costs due to inflationary pressures.

Since June, 2010, the U.S. dollar has lost nearly 14% of its purchasing power. Commodity prices, particular those for oil, metals and staples like food and cotton, all have been increasing steadily. The big winner of the past month has been silver, ‘the other precious metal’, which broke the $40 an ounce barrier last week. Silver is now rapidly approaching its all-time highs not seen since 1979-80 of about $50 an ounce. Gold has also been flirting closer to a new high of $1500 an ounce. Even a recent sell-off by profit-takers bottomed out at around $1440 an ounce for gold.

The primary driver for jobs and consumer spending, and confidence, still remains the housing market. Today’s initial jobless claims increase to 412,000 new filings for unemployment, as well as the anemic residential mortgage market are related. Together with renewed fears of inflation, whatever hopes of a sustainable recovery promoted by Anti-President Barack Obama appeared to have slipped away into the night. With ever-rising commodity prices, like gasoline and food, inflation fears and the depressed housing market point the way to a double-dip recession by this summer.

13 Responses to “Initial Jobless Claims Rise, Obama ‘Recovery’ Over”

1

Brian Says:
April 14th, 2011 at 8:08 am

Companys are just not hiring except for a few select niches. CNBC said CFO’s of corporations want to see a 25% growth in the top line and in demand before they will okay robust hiring again. Unfortunately demand has shrunk with all the job losses and pending job losses in city, state, and fed governments including teachers and fire and police departments and a stalling of the prison growth industries. The increase in productivity with current workers is adequate for the corporations to just contine gingerly as things are, even with 1.6 trillion or more cash on the books, and another 3 trillion plus in money markets. If you add offshore funds held there is well over 5 trillion dollars in cash basically sitting around, uninvested, earning no interest really, and not in the stock or bond markets either, Meanwhile corporate insiders are selling stock right now, and big bond funds have sold US Treasurys, so there really is no tightening of liquidity, and the tepid credit creation is adequate for those who want to take a chance. Meanwhile corporate ceo’s and their teams, and top management everywhere has received nearly a 10 percent pay and compensation increase so they are fat and happy and quite comfortable, so they are under no personal pressure to invest in the economy or hire large numbers of new workers, Worse there is a huge amount of productive capacity and plant and equipment idylling. All in all I think that need for a 25% turn up in the economy is a necessary precursor for corporate officers to start spending on expanding again is a huge hurdle to surmount.

I like Matt a lot. The story is just one more example of why our fiat currency system is corrupt.

6

Brian Says:
April 14th, 2011 at 1:27 pm

jim cramer says we are just in the 30th soft patch of his career. He’s had a good track record on macro issues. the hedgies are hoarding cash right now waiting for another shoe to drop. But is there even another shoe to drop? he says soft patches end, “they always do”.

7

Andy Z Says:
April 14th, 2011 at 2:21 pm

Speaking of Matt’s story, check out the video I posted at this article:

Jim Cramer is a patch o’chit! The guy admitted that he used to pump up trades, manipulating stocks. What a creep!

10

Micky Says:
April 14th, 2011 at 3:33 pm

Brian knocks Beck and blows Kramer

nuff said

11

Micky Says:
April 14th, 2011 at 3:37 pm

Kramer, Crammer, Cramer…whatever…

12

Ghost of Klo Says:
April 14th, 2011 at 11:02 pm

The right WANTS the economy to fall apart. You wouldn’t have that famous picture up if you didn’t. You want us to suffer, so you can use it to pin the blame on those who had nothing to do with causing it in the first place. You revel in disaster. From the sidelines you cheer on misery and want. You are agents of the Evil One, of mammon, and greed. You are deceitful witnesses that utter lies, who do not understand the meaning of truth, and it will only be when you entirely and completely win, that you will finally lose.

Just like that picture. The woman and her starving children deserted in a Hooverville. You know.

13

Andy Z Says:
April 15th, 2011 at 2:33 am

@ Ghost of Klo (LOL!)

As usual, Klo, you are all wet! First, the image of the starving woman and her children was taken in May of 1936…over 3 years after Hoover left office and FDR’s New Deal programs. Which demonstrates how then, like now, government tinkering with the economy leads to nowhere but more misery and suffering.

As for “the right” wanting the economy to fail, on the contrary, we want success. But we are adult enough to understand that such economic success demands honesty in our government and in particular our monetary system. You’ll read more about that in my article today.